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FitNet Purchasing Alliance Saint Augustine, FL 32095 904.599.9920 Phone 866.381.0908 Fax info@fitnet.net Email
GAO Protest B-401487 .- Raised to demonstrate the small business statutory priority over the GSA Schedule Program
To: Company From: Re: Fax: Sklarewc@gao.gov Fax: 202-512-9749 Date: June 30 , 2009
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Christine Sklarew U.S. Govt Accountability Office (GAO) Raul Espinosa Objection to Request for ‘Summary Dismissal’ of a GAO protest which challenges the rights of the Air Force to ignore the priority of small businesses over the GSA Schedule in the handling of Sol. #s F1V3J79100A001 and F1V3J79100A002 Timothy J. Cothrel, USAF Attny. John Caporal, USAF Sm. Biz Office Jack Boccarossa, SBA PCR
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Laura Mann Eye ster SBA Gen. Counsel Office Board, Fairness in Pro curement Alliance (FPA) Major Clark, As socia te Adm., Office of Advocacy
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I am in receipt of Col. Cothrel’s document, received on June 24th, attempting to have the alleged contracting abusive practices of the Air Force – represented by the actions of the Ellsworth AFB Contracting Command – and challenged by GAO B-401487 protest dismissed. For the record, the Ellsworth AFB Contracting Office had given me verbal assurances – in response to a written request -- that GAO would be allowed to rule on the merits of the protest to help prevent future occurrences of reported abusive contracting practices affecting small and disadvantaged businesses which do business not only with the Air Force, but with DoD. First of all, I am disappointed that the Ellsworth AFB Contracting Office did not keep its word. Second, I thank them for letting me demonstrate how the bureaucracy unfairly uses its vast legal machinery to trump the efforts of small businesses to both defend their statutory rights, protect their territory and seek justice through the GAO protest system. Again, for the record, I shall enumerate some of the alleged abusive procurement practices, which the Air Force Legal Counsel Office appears to be attempting to suppress and/or cover-up by claiming that ‘FitNet is not an interested party.” Failure to acknowledge and also to take action on two written requests1 - from an interested party – specifically showing interest to participate in the solicitation and also requesting for both of the solicitations to be restricted for small businesses as required by FAR 19.
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See ATTACHMENT 1 – copies of two emails from ‘an interested party.’
.. CHALLENGING THE CLAIM THAT . . FITNET IS NOT AN INTEREST PARTY
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Failure to give the statutory rights of small businesses priority – in the pecking order – over the GSA Schedule Program as required by 48 C.F.R § 19.502-2(a). Failure to utilize DoD Form DD 2579 to coordinate and ascertain the participation of small businesses as required by the FAR and by DoD - on both of the solicitations. Failure to consult with the SBA PCR about the plans to bundle both procurements. Failure to give “maximum practicable utilization” to disadvantaged businesses’ – as required by P.L 95507 in the two solicitations in question AFTER the solicitations had been announced on Fedbizopps and interest had been shown - by more than two small businesses including disadvantaged businesses – to participate in the bidding. Failure to compete both procurements - even at the GSA Schedule level – and arbitrarily select an obvious preferred and established supplier which was LARGE, by SBA Standards, to boot without even giving due consideration to small businesses on the GSA Schedule - as it is now required through DoD policy.
FACTS
The Air Force’s claim that FitNet is not an interested party is solely based on the false assumption that FitNet had to have a GSA Schedule in order to be considered an interested party. The Air Force failed to admit that the two solicitations in question had been announced on Fedbizopps, separately (not bundled) and as ‘unrestricted procurements’ (not GSA Schedule procurements) and that FitNet had communicated – twice in writing and once verbally - its interest to receive consideration in the bidding for both of them. Both of the FitNet written communications also requested for the two procurements to be restricted for small businesses as required by FAR 19. For the record, a third open market solicitation (F1V3J79103A001) seeking spinning bikes, was also sought in the exact same fashion. The Ellsworth AFB did restrict said procurement for small businesses AFTER FitNet had sought the change, but . . . the Air Force still awarded the contract to an established LARGE business while ignoring a lower and best value offer from a small business. In that selection, the procurement abusive practice referred to as ‘unfair end-user justification,’2 which is affecting small and disadvantaged businesses, was allegedly used. This additional action of the Ellsworth AFB Contracting Command has also been challenged through a size protest. (SIZ 6-2009-71) The above actions validate the findings of the Journal of Small Business Management Study on Barriers in the Federal Marketplace 3 and the RAND Corporation’s recent ‘Report on Federal Procurement from Small Firms.’ 4 Both of them have confirmed the mindset of the contracting community in giving undue preference to established large businesses at the expense of small. The Air Force also has failed to admit that Ms. Aquino at the Contracting Office at Ellsworth AFB had verbally assured me that both of the purchases would be sought through Fedbizopps. In said conversation, she never mentioned the bundling plans nor the intention to use of the GSA Schedule as the vehicle for the purchases.
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Contracting Abusive Practices to be Investigated - http://www.prweb.com/releases/2008/9/prweb1113164.htm Journal of Small Business Management Study. http://www.questia.com/googleScholar.qst;jsessionid=KH7Z0pGl1Dgfxrd1msHQQCLw1vvdX2GjZNccS5nCsLRkHXD0shvQ!2030025087!649918558?docId=5 000106789 4 RAND Corp Report on Fed Procurement from Small Firms. - http://www.rand.org/pubs/documented_briefings/2005/RAND_DB478.pdf
For the record, the required ‘small business coordination (DD Form 2579) procedure was also not followed. Furthermore, the ‘bundling plans’ were never brought to the attention of the SBA PCR nor the savings (there are none) which such a bundling action would create was ever articulated. The Main contention of the FitNet protest is that the Contracting Office decision not to reserve both of the solicitations for small business concerns -- especially after they were both announced on fedbizopps and interest by two or more small businesses had taken place -- was not reasonable and was contrary to the statutory set-aside provisions of the Small Business Act. On October 5th, 2007, the Small Business Administration (SBA) General Counsel Office, articulated - in a legal opinion - why FitNet has the legal right to challenge – as an interest party - solicitations which should be restricted for small businesses, but are not. I am herewith requesting for GAO to consider the legal references SBA had articulated on said legal opinion5 to help invalidate the Air Force contention that FitNet is not an interested party. Title 4 of the Code of Federal Regulations (C.F.R.), Part 21 § 21.0 (a)(1) defines an ‘Interested party’ for the purpose of filing a protest as “an actual or prospective bidder or offeror whose direct economic interest would be affected by the award of a contract or by the failure to award a contract. “ The failure of the Air Force to comply with my lawful request and not restrict both of the procurements for small businesses did affect my economic interest and my rights to a potential award. I respectfully request that the Air Force action to have GAO dismiss the protest be rejected and for GAO to proceed in ruling on the merits of the FitNet challenge. This challenge will help validate and establish – once and for all – the statutory priority of small businesses over the GSA Schedule Program and, additionally, the need to remove the small business exemption language associated with the GSA Schedules. GAO, for the record, did rule - in a similar fashion - the small business statutory priority over the Multiple Award Schedules (MAS) through the Delex case October 2008. Thank you for the opportunity to make a difference,
Raul Espinosa, President FitNet Purchasing Alliance
See ATTACHMENT 2 – SBA General Counsel Office legal references confirming the rights of FitNet to protest - as an ‘interested party’ - any solicitation which should be restricted for small business, but it is not.
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ATTACHMENT 1 Communications with Ellsworth AFB as an ‘interested party’
From: Raul Espinosa [mailto:info@fitnet.net] Sent: Tuesday, April 21, 2009 2:26 PM To: ‘MonaGayle.Aquino@ellsworth.af.mil’ Subject: F1V3J79100A001 – Ellipticals FitNet respectfully request both consideration on the above solicitation and wishes to petition for the procurement to be ‘set-aside for small business’ as per the requirements of FAR 19. FitNet can provide brand-name ellipticals and any other commercial requirements the base may have. We are submitting a brief profile of the company along with information on recent contracts. Thank you for your consideration, FitNet Purchasing Alliance
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From: Raul Espinosa [mailto:info@fitnet.net] Sent: Tuesday, April 28, 2009 2:53 PM To: ‘MonaGayle.Aquino@ellsworth.af.mil’ Subject: SOL # F1V3J79100A002 – Sources sought (treadmills) Our company (see attached profile) is interested in responding to the above solicitation. We respectfully request that the solicitation be posted as a ‘set-aside for small businesses’ as per FAR 19. FitNet can supply various brand-name commercial treadmills as athletic and fitness is our specialty. Thank you for your consideration,
Raul Espinosa
President
FitNet Purchasing Alliance
-------------------From: Raul Espinosa [mailto:info@fitnet.net] Sent: Tuesday, April 21, 2009 2:18 PM To: ‘MonaGayle.Aquino@ellsworth.af.mil’ Subject: SOL # F1V3J79103A001 – Spinning bikes FitNet respectfully request both consideration on the above solicitation and wishes to petition for the procurement to be ‘set-aside for small business’ as per the requirements of FAR 19. FitNet can provide both the spinning bikes along with the required certification. We are submitting a brief profile of the company along with information on recent contracts. Thank you for your consideration,
FitNet Purchasing Alliance
ATTACHMENT 2
SBA GENERAL COUNSEL OFFICE LEGAL REFERENCES JUSTIFYING THE ACTIONS OF FITNET AS AN INTERESTED PARTY
The SBA Believes that the issues presented in Dept. of the Army, supra, are distinguishable from the procurement and issues raised in this protest.